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Assignment 2 question 2

D

Dylan

Member
I'm going through the solutions for question 2 in assignment 2 and came across this: " Given that contracting out on a Protected Rights basis was abolished in 2012, it is worth considering whether the merged scheme will pass the Reference Scheme Test" (page 7 of the solutions). I appreciate that the merged scheme may need to check that the new combined benefits pass the RST. However I don't understand the reference to the abolition of contracting out on a Protected Rights basis, as I thought this affected DC schemes only? Could someone explain what is meant by the solution? Thank you for your assistance!
 
Contracting out

Hi Dylan

Thanks for your query.

The details of how a defined benefit scheme would have done so and what's involved is beyond the syllabus but ...

... previously, both defined benefit AND defined contribution schemes, could contract out on a Protected Rights basis.

Hope this helps,

Best wishes

Stuart Underwood
ActEd Tutor
 
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